Forecast: Significant decline in food price increases in 2024

Forecast: Significant decline in food price increases in 2024

According to a report by www.vol.at, the economic research institute Wifo predicts that the increase in food and beverage prices will decline to an average of 5.25 percent this year, although this will still remain above the expected general inflation of around 4 percent.

From a financial perspective, subdued inflation has various impacts on the market and the financial industry. First of all, lower prices for agricultural goods and fuels in 2023 will dampen prices, while at the same time wage increases will further fuel inflation. This is likely to create some uncertainty in markets as companies may face rising production costs and consumers may face higher prices.

The analysis also shows that food price increases have been enormous in the last two years. In 2022, food prices will have increased to an extent not seen in decades, with increased costs for raw materials and energy sources as well as high prices for agricultural goods being cited as the reasons.

In addition, food and beverage prices will have increased by a further 11.5 percent in 2023 compared to the previous year. This suggests that the financial impact could be significant for households and consumers, particularly for those in the bottom third of the income distribution.

Experts also warn against price regulations because they do not have a lasting effect on inflation and could have negative incentive effects on supply in the medium to long term.

Overall, subdued inflation is expected to lead to increased market volatility and financial stress for consumers. Companies may need to adjust their prices to compensate for rising production costs, which in turn could impact consumers' purchasing power.